Post-European Close Buying-Panic Lifts Dow Green For 2014

Despite European weakness, US equity investors decided bailing out BES with taxpayer money means BTFD. As soon as Europe closed, VIX was monkey-hammered lower and stocks took off, first running today's stops, then Friday's highs, then pressing all major indices into the green for August. Notably, "most shorted" stocks were sold hard early on and that provided the ammo for the bounce. VIX was clubbed over 2 vols lower back under 15 as EURJPY became all the fun-durr-mentals stocks needed to surge. Treasury yields rose as stocks rose but 10Y ended the day -0.5bps (30Y +1.5bps). The USD flatlined as modest EUR weakness was offset by GBP/AUD strength. PMs slipped lower as oil and copper gained. Credit markets rallied along with VIX. The Dow closed unch for 2014.

Stocks back into the green for August...

and Lifted the Dow green for 2014...

But US stocks remain red from Thursday's European close - when BES news started to leak...

As "most shorted" stocks were squeezed as Europe closed...

VIX and Stocks...

EURJPY and Stocks...

Treasuries ended unch in general weakennig after Europe closed...

Commity markets were split with oil and copper gaining but PMs lagging (driven by weakness at the European close)